Comment by the_snooze

They will go out of business, in the long-term. What PE does is hot potato: they "trim the fat" off an existing business to goose up margins in the short-term, unload it to someone else, and that someone else is stuck with a business that's unsustainable long-term because that "fat" was actually resilience.

Sometimes, these buyouts are leveraged, with the company itself taking on the debt the PE firm used to buy it, so the PE's own risk is minimal.